Daily Digest

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Daily Digest 9/15 - Fed Plans for the Next Crisis, The Death Of The Bakken Has Begun

Thursday, September 15, 2016, 10:55 AM

Economy

Almost a million Canadians couldn't handle a 1-point interest rate rise, TransUnion says (nervous nelly)

The Bank of Canada twice cut its benchmark interest rate in 2015 to stimulate the economy, and while the consensus economist view is that the bank has no plans to raise rates any time soon, that won't be the case forever.

Most borrowers could withstand a rate increase of 0.25 points, because it would just mean paying an added $10 or less every month toward their debt — not a severe sum. But for almost one out of every six borrowers, it would mean an extra $50 or more every month.

Expect Higher Correlations And Volatility In This Fed Manipulated Market (Alex)

It’s the direct result of central banks tickling investors into a yield frenzy, with little to no regard for credit quality or any other risk factor. This has resulted in an increasing amount of capital crowding into already extended assets.

And the correlations are further exacerbated by the prominence of quant driven funds whose algos are all positioning (making buying and selling decisions) off the same metrics.

The Fed Plans for the Next Crisis (Thomas C.)

Increasing the Federal Reserve's ability to purchase private assets will negatively impact economic growth and consumers’ well-being. This is because the Fed will use this power to keep failing companies alive, thus preventing the companies’ assets from being used to produce a good or service more highly valued by consumers.

Credit card skimmers found at local gas pumps (Don R.)

“We’ve obviously ramped up our inspection and are continuing to do so as we also alert these associations and have them get the word out to stations to be vigilant and check their dispensers and make sure that if there’s any unusual activity out there to maybe investigate and find out what’s going on,” said Frassetto.

Poll Shows Tight Race for Donald Trump and Hillary Clinton (jdargis)

According to a New York Times/CBS News survey, Mrs. Clinton holds an edge among likely voters but ties with Mr. Trump when Gary Johnson and Jill Stein are figured in.

Doctor Explains Why Hillary's 9/11 "Medical Episode" Is More Consistent With Parkinson's Than Pneumonia (Joe M.)

Among other things, Noel points out that if Hillary actually was suffering from such a severe case of pneumonia that it forced her to literally collapse on a sidewalk, it's extremely unlikely that she could make a seemingly full recovery after only 90 minutes at Chelsea's apartment and feel well enough to great onlookers and snap a selfie with a child. Per Noel, Hillary's recovery timing is more consistent with how long it would take her to ingest a dosage of Levodopa and wait for her Parkinson's symptoms to subside. Noel also points out that sunglasses with dark blue lenses, like the ones Hillary wore this weekend despite the cloud cover, have been noted by doctors to help treat patients with major motion disorders such as Parkinson's disease.

The Burning Platform: Damned If You Do, Damned If You Don't (Thomas C.)

Jack Dolance, an attorney for the Williams’ family, explained to the Post that Mr. Mader’s termination “is pretty clear evidence of their policy and that the way they feel [the shooting of Mr. Williams] should have been handled. Not only do they think he should have been shot and killed, but shot and killed more quickly.”

The police are unable to understand that had Mader been in the danger they claim he and his fellow officers were in — he would have been killed long before backup arrive. However, that simply wasn’t the case.

Quest project captures a million tonnes of CO2 in the oilsands: Shell (Tom L.)

"I think the use of something like carbon sequestration, and the ongoing operational improvements that we're constantly committed to, are a part of us navigating across that bridge."

As for building carbon capture projects without government support, she says that would be largely reliant on higher carbon prices and more options to sell the carbon captured.

The Death Of The Bakken Field Has Begun: Means Big Trouble For The U.S. (reflector)

The mighty Bakken oil field located in North Dakota reached peak production in December 2014 at 1.26 million barrels per day (mbd) and is now down to 942,000 bd. This decline is no surprise to me or to my readers who have been following my work for the past several years.

Ag Banker Says Communication Will Help Farmers Survive (MJB)

He knows that means some will be forced out of business. The latest Rural Mainstreet Index (RMI), which surveys rural bankers from across the Midwest, supports that, showing one in five crop farmers, or nearly 20%, will suffer negative cash flows in 2016. Hoskins says those are sobering numbers and precisely why inputs will have to drop.

Humans have literally decimated Earth's wilderness, study finds (Adam)

"The wilderness decline around the world is most in the tropical biomes​, the tropical rain forests​ have lost a lot of wilderness," study co-author Oscar Venter, of the University of Northern British Columbia, told CBS News. "A lot of the Amazon has been lost, the mangrove ecosystems, which are really important wilderness areas have been hit. They are a nursery ground for a lot of the world’s wildlife – young fish are reared in these mangrove ecosystems​, they are a base for a lot of the fisheries. Now, there is almost no wilderness left in the mangroves."

Warmer oceans bringing more severe tropical cyclones to land (jdargis)

Having seen this increase in dangerous storms, the authors examined changes in sea surface temperature, which can feed energy into storms. They hypothesized that a relationship exists between the increase in storm intensity and human-driven oceanic warming. When looking at the four clusters of storm data separately, they saw that the two clusters of storms that form in regions with more pronounced oceanic warming saw steeper increases in both frequency and intensity.

Gold & Silver

Click to read the PM Daily Market Commentary: 9/14/16

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

5 Comments

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Kunsler and Orlov

Snippets of note from a discussion about Rob O'Grad's book on Dunbar's number. More context can be found here.

http://cluborlov.blogspot.com.au/2016/09/kunstlercast-transcript.html#more

 

Nothing of the scope of the Soviet Union would have been possible if it was just Stalin sitting there making every single micro-decision.

 

Well, they care of each other. People are funny that way. They're not reasonable acting on their own behalf. They're weak and greedy and vice-ridden and lazy. But the moment they start helping each other and the moment their sense of self is bound up with how useful they're perceived and how useful they feel vis a vis each other, that's when things start to change for the better

Right now, people in Louisiana are trapped. All those people in California that had to live with a methane plume for a few months, they were trapped. That's just going to happen in more and more cases in more and more places.

The people who are doing it now are people who are poor. If you're in trouble in the US, don't try asking rich people for help because they'll do nothing for you. Find some good poor people because if you help them, they'll help you

It's sort of like wading into a crocodile-infested river and going, "Hey, crocodiles. It doesn't matter that you're crocodiles. We're all just animals." It doesn't work. It doesn't work. 

Orlov: They want to pretend that they're going to start a war with Russia. 
 
Kunstler: For what purpose?
 
Orlov: For the purpose of justifying their existence. 

 

cmartenson's picture
cmartenson
Status: Diamond Member (Offline)
Joined: Jun 7 2007
Posts: 5727
The high cost of following NATO

As the US and NATO continue to conduct military exercises right off the border of Russia, the Baltic states are often the front lines of those hawkish displays.

Leaving aside that there’s no compelling reason for ‘poking the bear’ that’s yet been presented, and I am not a believer in the idea that Russia seeks to expand vigorously at this point in time, these forays have real costs.

To the Baltic states…who had counted trade with Russia, including tourism, as important parts of their economies.

NATO just spends a few more bucks and then uses that as a reason to ask the member states for even more. That’s a win-win for entrenched military-industrial types.

But here’s a real-world, and very large impact to the Baltic Sea member states:

Russia to Stop Exporting Oil Through Foreign Baltic Ports

Sept 15, 2016

Russia will stop exporting its oil through foreign ports sitting on the Baltic Sea by 2018, according to a new report by Reuters.

Nikolai Tokarev, head of the Russian pipeline monopoly Transneft, told President Vladimir Putin about the plan during a meeting on Monday.

"Last year, around 9 million tonnes were shipped through the Baltic ports, while this year the figure was 5 million tonne,” Tokarev told Putin, according to the meeting’s official transcript on the Kremlin’s website. "By 2018, we will reduce this flow to the Baltic ports to zero and will direct it to our ports instead, as we have surplus capacity.”

“Good,” Putin replied.

Crude supplies currently shipped through the Latvian cities of Riga and Ventspils will be redirected to Russian ports on the Baltic Sea with excess capacity, the oil executive said.

The suspension of Russian imports to Latvia, Estonia and Lithuania would hurt the former Soviet republics’ transit revenues. Vitol, the world’s largest oil trader, currently operates out of Ventspils.

The three European Union-member countries have been dependent on Russian oil since gaining independence from the Soviet Union in 1991.

Must be tough to be in the Baltic states position.  

Russia is pretty serious about all this though, and the lack of focus on this in the western press is pretty astonishing to me.

Or, sadly, not really.

 

TechGuy's picture
TechGuy
Status: Gold Member (Offline)
Joined: Oct 13 2008
Posts: 414
Re: Russia to Stop Exporting Oil Through Foreign Baltic Ports

Well its going to get a lot worse arount 2019 when Russia completes its NatGas pipeline to Europe

http://www.reuters.com/article/us-russia-gazprom-siberia-idUSKCN11L227

I think Once Russia has access to the Asian market, there is no need to sell it to Europe. I believe prices for natGas are higher in Asia than in Europe.

 

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4145
Medical costs jump in August by largest amount in 32 years, CPI

Rising Yields May Present Governments With a Bigger Bill

Wall Street Journal-Sep 15, 2016
That comes as yields on sovereign debt, from the U.S. to Japan, have risen in secondary markets amid concern that central banks will stop expanding or will ...

Stimulus fears drag $1tn of bonds back to positive yields

Financial Times-19 hours ago
The rupturing of the summer calm in markets over the last week has swept more than $1tn of sovereign and corporate bonds back into positive yielding territory, ...

Japan PM adviser says benefits of BOJ's negative rates 'very big'

Reuters - ‎6 hours ago‎
TOKYO The benefits of the Bank of Japan's negative interest rate policy are "very big" because it is encouraging corporate debt issuance and lowering mortgage rates, an adviser to Prime Minister Shinzo Abe said on Friday. The policy has weighed on bank ...

Singapore August exports stall, weak outlook keeps pressure for stimulus

Reuters - ‎13 hours ago‎
In August, Singapore cut its 2016 economic growth forecast to 1-2 percent from the previous forecast of 1-3 percent expansion, leaving the door open for additional policy stimulus. Exports to the United States grew 4.8 percent in August on-year ...

Treasury to Sell $87 Billion in Debt

Wall Street Journal-18 hours ago
The Treasury Department will auction $87 billion in securities next week, comprising $36 billion in new debt and $51 billion in previously sold debt. Details (all ...

More than 100 Oil and Gas Operators have Filed for Bankruptcy as of August

Oil & Gas 360 - ‎15 hours ago‎
The three companies had combined debt of approximately $367 million, bringing the total number of oil and gas producers to file for bankruptcy in 2016 to 58, and a total combined debt of $50.4 billion, according to Haynes and Boone's Oil Patch ...

Spain's public debt stands at 1.243 trillion US dollars in Q2

Global Times-8 hours ago
The debt of the central administration reached 964.732 billion euros, rising by 0.27 percent from the first quarter. The debt of local governments rose slightly by ...

Report: Most of Illinois universities' state funds go toward pensions

Will County Gazette-18 hours ago

The report said $6.9 billion in tax-based funding has subsidized university pensions ... “Students are heavily in debt with student loans, with no chance of paying .

Bank of Ireland pension gap seen nearing €1.5 billion by JP Morgan

Irish Times-20 hours ago
Bank of Ireland's pension deficit is likely to swell to almost €1.5 billion by the end of this month, casting further doubt on the lender's ambition to start paying ...

Fitch Downgrades State of Rio de Janeiro to 'C' from 'B-'

Reuters-16 hours ago
KEY RATING DRIVERS The downgrade to 'C' from 'B-' indicates that the state ... RATING SENSITIVITIES Guaranteed Debt: Fitch does not expect ERio to enter ...

Medical costs jump in August by largest amount in 32 years, CPI shows

MarketWatch - ‎2 hours ago‎
Although they are paying more for housing and health care, Americans are also paying less for food and energy to help ease the financial strain. The cost of groceries, or food at home, fell for the fourth straight month. Americans who go out to eat ...

 

AKGrannyWGrit's picture
AKGrannyWGrit
Status: Gold Member (Offline)
Joined: Feb 6 2011
Posts: 465
When did he go shopping?

The article on "Medical Costs Jump In August" suggests that although we are paying more for medical costs we are paying less for food and gas which helps ease the strain.  Obviously the author  hasn't been grocery shopping lately or cooks for a lot of people otherwise he would know food costs have NOT gone down.  

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